102 



Coin and Currency in [No. 9, new series. 



use of gold in large payments, and to the exportation of all silver 

 coins of full weight.* 



In the United States of America after the discovery of the Cali- 

 fornian gold-fields, the same evil was felt, the same remedy 

 adopted, and with the same success. Gold becoming more abun- 

 dant fell in real value ; while its nominal value fixed by law, the 

 amount of silver to which it was equivalent, remained unchanged. 

 All large sums were paid in gold, relatively the cheaper metal, 

 and the silver coin was rapidly disappearing, exported at a profit. 

 Change of a 5-dollar piece in silver could scarcely be obtained 

 anywhere. The U. S. silver dollar contained 412 \ grs. In 1853 

 Government gave up coining silver dollars altogether, and reduced 

 the weight of the half-dollar piece to 192 grs. At the same time 

 silver was made a legal tender only to the amount of Sp. drs. 5. 

 Before this change the ounce of silver was worth 116-^- cents, 

 now it is worth 125 cents, or 1^ dollars. Since that time the in- 

 trinsic value of silver has risen as high as 123 J cents, showing 

 that it is scarcely sufficiently overvalued, and that a re-adjustment 

 may be necessary at no very distant date. 



In France at present the same inconvenience is severely felt. 

 Our pity must be diminished by the fact that this is the second 

 time the French system of a Double Standard has been attended 

 with unpleasant consequences. Experience seems to have lost in 

 France, the didactic powers attributed to her in our Latin Gram- 

 mar. On the former occasion it was the silver that was over- 

 valued and the slighted gold that left the country ; and from what 

 I have said about the more frequent circulation of silver coin than 

 of golden, the present deficiency of silver currency must be a far 

 greater inconvenience than the former exportation of gold. " In 

 France previously to the re-coinage in 1785, the louis-d'or was 

 rated in the mint proportion at only 24 livres, when it was really 

 worth 25 liv. 10 sols. Those therefore who should have discharg- 

 ed the obligations they had contracted by payments of gold rather 

 than of silver, would plainly have lost 1 liv. 10 sols, on every sum 

 of 24 livres. The consequence was that very few such payments 



* The present system of overvaluing silver and fixing a superior 

 limit of legal tender was proposed by Adam Smith in the Wealth of 

 Nations. 



